So it has always baffled me that tech companies do the exact opposite. They motivate the most skilled people to leave low-cost areas and move to the most expensive. They pile them in higher and higher and keep driving their own labor costs through the roof. And VCs exacerbate the problem by refusing to fund anything in less expensive locations.
It's easy to dismiss this as irrational. But is it really? Are there benefits to this that are so huge they outweigh the costs?
If you could pay $10,000,000 to move 1000 devs to Kingman, AZ, then cut their avg salary from $250,000 to $150,000, why wouldn't you do that? What is the downside to saving $90,000,000 after moving expenses in the first year alone?
The obvious first argument is reduction in the standard of living would cause the talented to refuse. I'm sensitive to this, but also skeptical. People making 150 in Kingman would improve their SOL.
I could be wrong, but I think there are more important factors. I think there is too much money at stake for these employers to have not thought it through. When a common behavior looks insanely irrational, it is more likely that you haven't seen all the variables.